This week we explore sales at casual restaurants, what people think of Congress, where business people really eat and more.

Malcolm Knapp reported that September sales were down 1.9 percent over sales of last year for the 50-plus casual restaurant chains that participate in the Knapp-Track program. Same-store guest counts dropped 3.6 percent while check averages were up 1.7 percent on a year-to-year basis. This was the fourth consecutive month that companies included in the Knapp-Track report posted negative same-store sales.

In a bit of better news, family dining and upscale steak houses Malcolm Knapp also tracks are trending positive with same-store sales increases in low single digits.

Knapp expressed concern that the government shut down will place a further constraint on restaurant sales. He also refers to the United Sates as an "allocation nation" as consumers carefully pick and choose where to spend their money.

Looking ahead to the fourth quarter, Knapp predicts casual dining trends will remain negative. He also sees easing gasoline prices to be a slightly positive factor even though no hard and fast relationship exists between gas prices and restaurant sales. He also notes that higher income customers (those with more than $75,000 annual income) account for 57 percent of restaurant spending, up from 52 percent a few years back. The more pronounced polarization of income represents a problem for mass market brands.

Knapp-Track information is courtesy of Bank of America Merrill Lynch.

Also, it's important to note that September retail sales were not released by the U.S. Department of Commerce Bureau last Friday due to the federal government shut down. The same is true of other government statistics such as the Producer Price Index. When the shut down is over we can expect the data to be updated and released within a few weeks.

Economic News This Week:

Congress doesn't get no respect. With a Gallup Poll reporting that the American public now perceives dysfunctional government as the most important problem facing the country today, bypassing the economy in general and unemployment, it comes as no surprise that people do not exactly hold the U.S. Congress in high esteem. The Public Policy Polling Institute found that Congress has only an 8 percent approval rating by the American public. Putting that into perspective, the Institute reported that there were higher approval ratings for jury duty, hemorrhoids, witches, cockroaches and even zombies.

MasterCard has tried to fill in for the lack of retail sales information from Washington, D.C. by providing its SpendingPulse data. Essentially MasterCard states September retail sales were up 3 percent over September 2012, attributing the growth to a drop in gasoline sales and "no major growth in other sectors." (MasterCard does monitor restaurant sales but the figures are available only on a paid subscription basis.)

First-time jobless claims shot up to 374,000, an increase of 66,000, for the week ending Oct. 5, 2013. The 4-week moving average jumped to 325,000, an increase of 20,000. Evidently California continues to experience computer problems in processing claims.

American spending retreated in September. The Gallup Organization's self-reported average daily spending hit a 5-year high in August at $95 but fell back to $84 last month. It is possible that the sharp move upwards in August may have been a glitch.

Consumer credit was one of the government reports issued as the Federal Reserve reported Americans increased their borrowing by $13.6 billion in August. The increase came from more non-revolving credit such as auto and student loans while revolving credit — mostly credit card borrowing — declined.

U.S. home foreclosures increased 1.3 percent in August over July according to CoreLogic. The 47,000 completed foreclosures represent a major improvement compared to the 72,000 completed foreclosures in August 2012. But, from 2000 to 2006, the U.S. averaged 21,000 foreclosures per month.

Mortgage applications rose 1.3 percent for the week ending Oct. 4 after falling by 0.4 percent the previous week. The Mortgage Banking Association also found that interest rates continue to head downwards.

Volatile food prices are now the norm for the world, cautioned the Food & Agricultural Organization of the UN. Even though prices for cereal have declined 20 percent since this time last year the FAO urged that steps be taken to adapt to the volatility.

Holiday sales may improve over last year but not by much. The National Retail Federation predicts a 3.9 percent increase in consumer sales this Christmas season vs. 3.5 percent last year.

Consumer sentiment takes a tumble. The Reuters/University of Michigan Index preliminary report dropped to 75.2 from the final September report of 77.5. One observer opined that the final October index may be still lower. Gallup's U.S. economic outlook for the week ending Oct. 6 fell to minus 34, a 12-point drop from the previous week and the steepest one-week decline since Lehman Brothers crashed in 2008.

Foodservice News This Week:

The $50, 3-martini lunch remains a relic of bygone days. Expense account software-management company Certify analyzed the places listed on millions of business receipts and found the most expensed restaurants were Starbucks followed by McDonald's and Subway. As far as the top rated restaurants go, Certify says they are Jimmy John's, Chipotle, Chick-fil-A, Panera Bread, and Dunkin' Donuts. None of this should be surprising given business travelers focus on speed and convenience. And the increasing importance of the availability of Wifi.

Split up Darden is the recommendation from a hedge fund company that owns 2.8 percent of the multi-concept chain restaurant company. The proposal calls for splitting Olive Garden and Red Lobster into one company and Darden's other brands — LongHorn, Capital Grille, Edie V's, Bahama Breeze, Seasons' 52, and Yard House – into a second. The Wall Street Journal quotes a Darden spokesman as saying the company would "thoroughly evaluate" the suggestion.

Financing is available for large and middle market restaurant firms as well as franchisees of "top tier" brands but more difficult for smaller franchisees of small brands to attain. CIT Corporate Finance, the provider of this information, also believes there may be increased activities in mergers and acquisitions as well as initial public offerings for restaurant companies.

Darden's Red Lobster has stopped testing a fast-casual concept. The pay at the counter concept, called Seaside Express, was tested at two Red Lobster restaurants which also kept their traditional table service.

The most beloved brands in the world, according to research by APCO Worldwide, include Subway (#32), Darden (#34) and Tim Horton's (#61). Sysco was #71 while the most beloved brand was Disney.

This week's food truck news comes from the National League of Cities which estimates "mobile food vending" produces $650 million in revenue annually. While certainly not pocket change, Technomic, Inc. projects 2013 restaurant and bar sales at $420 billion with fast feeders taking in $231 billion of that.

Fazoli's new fast-casual restaurant concept will go to market with the name Venti-Tri, which means 23 in Italian. The first unit will open early next year in Baltimore.

Saks Fifth Avenue announced a new signature restaurant concept named Sophie's after American fashion designer Sophie Gimbel. The first location for the restaurant will open in Chicago in January 2014 followed by a summer opening for Sak's flagship N.Y. store.

McDonald's remodels continue to roll on in Ohio according to the Columbus Business Journal. About 50 of the 121 McD's in Central Ohio have been through the process which includes new furniture and fixtures, a new color scheme, more and multiple seating options, digital menu boards and flat screen TVs.

The Fas Mart convenience chain is testing a new foodservice program called Red's. The offerings include salads, sandwiches and yogurt parfaits made on-site plus made to order paninis according to cspnet.com. If successful, Red's may replace the company's Fas Lane Café which essentially sold fried chicken.

Growth Chains: Dunkin' Donuts reached a multi-store development agreement with an existing franchisee that will bring 18 new units to California and another with a new franchisee that will open 8 more. Atomic Wings is committed to a minimum 30 units in Mexico with the first 2 scheduled to open in the next 12 months. A Spicy Pickle franchisee is opening a restaurant in Qatar with 6 more planned. Famous Dave's has agreements with 4 different franchisees for a total of 12 locations in New York, Maryland, Michigan, Ohio and Puerto Rico.